External sector & international economic bodies

Answer: (d) Neither 1 nor 2

The 6 per cent Equalisation Levy was created as a separate chapter of the Finance Act, 2016, outside the Income-tax Act, 1961. Because it is not a tax on income, tax treaties do not cover it, so the foreign firm gets no treaty credit at home.

• ✗ 1. The Finance Bill, 2016 inserted a new chapter titled 'Equalisation Levy' in the Finance Bill itself (Chapter VIII of the Finance Act, 2016); the Income-tax Act only exempted the same income under section 10 to avoid double taxation.
• ✗ 2. The CBDT's e-commerce committee, which designed the levy, noted that as it is not charged on income, Double Taxation Avoidance Agreements do not apply and no tax credit is available in the country of residence.
• • Since then Since then the 6 per cent levy on online advertisement has been abolished with effect from 1 April 2025 (Finance Act, 2025).

Remember · Equalisation Levy (2016): 6% on payments to non-resident online-ad providers without a PE in India; enacted in the Finance Act, not the Income-tax Act; outside DTAAs, so no foreign tax credit.

Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (a) 1 only

India has for years imported more edible oil than it produces, meeting well over half of its needs from abroad, mainly palm and soybean oil. Imports are far from duty-free: the Budget of February 2018 raised customs duty on crude edible vegetable oils from 12.5 to 30 per cent.

• ✓ 1. In the years before 2018 imports supplied roughly 60 per cent of domestic edible-oil consumption, so the quantity imported exceeded domestic output; the government's oil-palm mission itself cites the heavy import burden.
• ✗ 2. Customs duty is levied and adjusted from time to time to protect oilseed farmers; the 2018-19 Budget raised it to 30 per cent on crude and 35 per cent on refined edible vegetable oils.

Remember · India is among the world's largest importers of edible oil (mainly palm and soybean); it imports more than it produces, and uses customs duty to balance farmers' and consumers' interests.

Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (d) WTO

India passed the Geographical Indications Act, 1999 as a member of the World Trade Organization (WTO). Protection of geographical indications is required by the WTO's TRIPS Agreement (Articles 22 to 24), so the law was needed to meet that obligation.

• ✓ (d) TRIPS, the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights, covers geographical indications in Articles 22 to 24. India enacted its GI Act in 1999 as a WTO member; it came into force on 15 September 2003.
• ✗ (a) The ILO (International Labour Organization) deals with labour standards, not intellectual property.
• ✗ (b) The IMF deals with monetary cooperation and balance-of-payments support, not intellectual property such as GI tags.

Remember · GI Act, 1999 (in force 15 September 2003) follows the WTO's TRIPS Agreement, Articles 22-24.

Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error

Answer: (c) 1, 3, 4 and 5

At the time of the exam, ASEAN had free trade agreements with Australia (with New Zealand), China, Japan, South Korea and India. Canada and the USA were not among ASEAN's free-trade partners, so the correct set is 1, 3, 4 and 5.

• ✓ 1. Australia (together with New Zealand) is a party to the ASEAN-Australia-New Zealand Free Trade Area, AANZFTA.
• ✗ 2. Canada had no free trade agreement with ASEAN in the list of ASEAN's FTAs published in 2018.
• ✓ 3. China is a partner in the ASEAN-China Free Trade Area, ACFTA.
• ✓ 4. India is a partner in the ASEAN-India Free Trade Area, AIFTA.
• ✓ 5. Japan is a partner in the ASEAN-Japan Comprehensive Economic Partnership, AJCEP.
• ✗ 6. The USA does not appear in ASEAN's list of free trade agreements with dialogue partners.

Remember · ASEAN's FTA partners (as in 2018): China, Japan, South Korea, India, and Australia-New Zealand. Not Canada, not the USA.

Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink · Report an error